Thank you for joining us for the Pacira Pharmaceuticals Fourth Quarter 2012 Financial Results conference call. At this time, all participants are in a listen-only mode. Following the formal remarks, Pacira’s management team will open the lines for a question and answer period. Please be advised that this call is being recorded at the company’s request and will be archived on the company’s website for two weeks from today’s date. At this time, I would like to introduce Jessica Cho of Pacira Pharmaceuticals. Please go ahead.

Thank you and good morning everyone. Welcome to Pacira’s fourth quarter 2012 financial results conference call. Joining me on the call today from Pacira are David Stack, President and Chief Executive Officer, and Jim Scibetta, Chief Financial Officer. Before I turn the call over to the management team for their prepared remarks, I would like to remind you that certain remarks made by management during this call about the company’s future expectations, plans and prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements about the company’s future expectations, plans and prospects include statements regarding the company’s plans to develop and commercialize Exparel, the success of commercialization of Exparel, the rate and degree of market acceptance of Exparel, the size and growth of the potential markets for Exparel and the company’s ability to serve those markets, Pacira’s commercialization and marketing capabilities and other statements containing the words believes, anticipates, plans, expects, and similar expressions. Any such forward-looking statements are based on assumptions the the company believes are reasonable but are subject to a wide range of risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. Many of these and other risks and uncertainties are described in the risk factor section of Pacira’s most recent annual report on Form 10-K for the fiscal year ended December 31, 2012 and in other filings with the SEC, which are available through the investor section of the Pacira website at www.pacira.com or on the SEC website at www.sec.gov. All of the information in this conference call is as of today, March 7, 2013 and should not be relied upon as representing the company’s views as of any subsequent date. While the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so; therefore, you should not rely on these forward-looking statements as representing company views as of any date subsequent to today. I will now turn the call over to Dave Stack. Dave?

Thanks, Jessica. Good morning everyone and thank you for joining us for this review of our fourth quarter 2012 results. On the call today I will review our commercialization success to date with Exparel followed by an update on our manufacturing capabilities and also our continued Exparel label and commercial expansion efforts, then Jim will provide a summary of our fourth quarter 2012 financials and discuss general updates. We will then open up the call for questions. On the call today, we will be primarily talking about Exparel, our novel treatment for post-surgical pain management which we launched commercially in the United States in April 2012. The first and only multivesicular liposome local anesthetic for use in the peri- or post-surgical setting, Exparel utilizes our proprietary DepoFoam technology to provide local analgesia for up to 72 hours with a reduced need for opioids. Approved for single dose administration into the surgical site to produce post-surgical analgesia, Exparel uses the same infiltration technique as currently marketed local anesthetics such as bupivacaine. Of the 75 million surgical procedures performed annually in the United States, we believe this indication provides a target market of 40 million surgeries appropriate for Exparel, 10% of which equals a revenue opportunity of approximately $1 billion. With three full quarters of Exparel sales under our belt, we continue to be pleased with the launch of Exparel and our ability to expand its use within a wide range of surgical specialties. The new marketing initiatives we launched in the fall have continued to drive accelerated sales growth. For the months of September through December, we saw month-over-month outgrowth of average daily box sales totaling 13%, 23%, 26% and 39% respectively. We reported net sales of $7.8 million for Exparel in the fourth quarter, up 70% from the 4.6 million…

Thanks, Dave. With this truly exceptional year behind us, I’m pleased to report on our 2012 financial results and also touch on what to expect for 2013 and beyond. To orient you for the year and our path moving forward, I’m going to start with some broad comments on our financial model. First, I want to reiterate that with Exparel revenue trajectory we have experienced now emanating from the three fiscal quarters of launch, we expect the company to be cash flow positive at some point in 2014, and we now have well in excess of the cash we need to get from here to there with the completion of the convertible note financing where we set out to raise approximately $50 million of new money over what we needed to refinance our debt, and that was almost entirely to serve as a cushion to ensure path to achieving profitability, and then we upsized the deal by 40 million due to very positive feedback and demand. Finally, once profitable, we expect to quickly drive significant EBITDA and EPS given our scalable manufacturing infrastructure and modest-sized specialty field force targeting a large market opportunity, coupled with a restrained G&A infrastructure and measured and entirely discretionary R&D outlook. As reported, our total revenues for the year were 39.1 million compared with 15.7 million for the year 2011. Total revenues for the fourth quarter were 10.5 million compared with 4.2 million for Q4 2011. A substantial portion of the increase in revenue was of course driven by product sales of Exparel, which totaled 7.8 million for the fourth quarter of 2012 and 14.6 million for all of 2012. As a reminder, Exparel was commercially launched in April 2012. Exparel sales emanate from the sale of product shipped directly to end users, including hospitals…

Thanks, Jim. Catherine, can you see if there is any questions?

Certainly, thank you. First question is from the line of David Amsellem from Piper Jaffray. Please go ahead.

Thanks. I have just a few. I wanted to just clarify how we should think about the Exparel gross margin in 2013 under the old suite, and then just remind us what kind of gross margins you’re expecting on the product when the new suite comes on line, how we should also think about fixed and variable costs once Suite C is up and running. Thanks.

Sure. Thanks, David. So if you look out broadly, as we’ve communicated, we’ve got that fixed cost infrastructure, and when we’re driving significant revenue we’ll have quite compelling gross margins as we’ve got—you know, what we talked about is the 30 million-ish fixed cost manufacturing infrastructure and 10 to 15% variable costs. In 2013 and 2014 as we’re putting Suite C online, that fixed cost number may move around, may tick up a little bit, as I indicated, because we’re doing those two things in parallel. But as we get beyond into ’14 and we’re operating only in Suite C, we should have just a fixed cost number that might be in the 30, $35 million range. We’ll have to see as we go forward here.

Okay. And then how should we think about the variable cost specific to Suite C? Is it also that 10 to 15%, or is it lower?

You know, we’ve said 10 to 15% because that’s what we’ve experienced. As we’ve gotten into this a little bit more, David, I’d like to think it’s going to be at the lower end of that range, or we’ll keep people apprised of that as we make some progress. Last year, we were really just focusing on making product that we could sell. We’re now starting to do some efficiency activities internally, and then in addition as we get to a larger scale and we’re just buying things in bulk, you would expect us to be able to squeeze some savings out of that as well.

Okay. And then just turning to the commercial performance, can you maybe, David, quantify the volume mix for Exparel among orthopedic surgeries, soft tissue, and also how much of the business is cash pay, how that’s changed over the past quarter, and then also talk about what kind of specific surgeries where you’re seeing the most growth since the new year. Thanks.

Thanks, David. The vast majority—the easy answer is that the vast majority of our sales remain in soft tissue surgeries. The two components of that are plastics, where we’ve done pretty well, and these are soft numbers, David, because of the way that plastics is practiced. Some of it is in ambulatory surgery. Some of it we can measure very specifically when a box goes directly into a plastic surgery office, and some of it is in the hospital where the drug has increasingly been used in reconstructive procedures. But if you put that data together as best you can, our projections are that plastic surgery is roughly 15% of our net sales, and it’s growing and we expect that to be an important component of sales. As you know, we launched off of our hemorrhoid data set into abdominal soft tissue, and when we got into the fourth quarter that was virtually all of our revenue. So the other indications where the clinicians have started using the product really is a fourth quarter event, and so I would expect that orthopedic, as we reported the numbers in 2012, was a very small percentage of sales – something less than 10% for sure. The interesting thing about orthopedics is that when people start to use the product in earnest, you see a shift away from the other opportunities to produce post-surgical analgesia in a way that it almost becomes an all-or-nothing. And so unlike any of the other opportunities that we’ve seen, we see centers adopt Exparel in 100% of their cases, and so it’s very interesting to us. It’s one of the strategic things that we are focusing on, but as a percentage of total revenue as we sit here in March, David, it still is a modest percentage of our total revenue. One of the reasons we are focusing on it is the significant growth factor. Does that make sense?

Mm-hmm, that does. Thank you.

And I should also say, David, just for the sake of completeness, the marketplace is also using the product in these TAP infiltrations in a very interesting way, and so in addition—so maybe if I characterize it in just one sentence, we see abdominal soft tissue and plastics continuing to grow at a trajectory that you would think was appropriate for a launch, and then on top of that the more aggressive growth scenarios are the TAP infiltrations where the product really does change the way medicine is practiced, and orthopedic surgery where, again, we see these explosive growth opportunities.

Okay, thank you.

Thank you. The next question is from the line of Richard Lau from Wedbush Securities. Please go ahead.

Good morning, guys. So my question is about the—I believe when you guys launched, some hospitals had restrictions in terms of what types of surgeries Exparel could be used in. I was wondering if those restrictions have lessened over time, and in particular if the adoption among the orthopedic surgeons has helped that at all.

Yes, Richard. We still have the full gamut of different opportunities in terms of access. We do have places where the product is allowed for specific surgeons and/or specific surgery groups. Generally the thought process there is that they will do some type of a drug utilization evaluation and demonstrate in their patient mix that the product really does what they say it’s going to do, and then the restrictions are taken off; and indeed, that’s what we’ve seen, especially in some of the very big centers on the east coast, so that’s working well. You are right in your second characterization also that when we are involved in orthopedics, and especially when we have KOL orthopedic folks that are largely in an orthopedic center of excellence, it does appear to us that the formulary approval process and the adoption of the product moves much faster than it does in the scenario that we launched into with the colorectal surgery and with abdominal soft tissue.

Okay, great. That’s helpful. Thanks, guys.

Thank you. The next question is from the line of Corey Davis from Jefferies. Please go ahead.

Thanks very much. A couple questions. When you have success at a certain center and a lot of folks are using it, does that help or hurt you in negotiating with, say, a new center that’s going through the P&T process that may look at that and say, wow, it’s a good drug but all of a sudden it become a big line item for them.

Yeah, it’s an interesting question, Corey, and of course we have to be careful that it doesn’t hurt us. We have this team of professional folks that I referenced on the call, have all of the tools for data collection and statistics and data management, et cetera, to empower our folks in order to evaluate the product on the total economic package and the opioids bearing package. So I think increasingly as the data set and the marketplace and, more importantly, as the experience of the KOLs lead to patient satisfaction and an earlier discharge and a reduce resource consumption inside the hospital because these people are not nauseous and having pruritis and some of even the more simple things associated with the use of opioids, folks start to understand that the story here is not a simple line item, pharmacy budget. I would also say, Corey, that the environmental issues that are pretty important in the marketplace in gaining traction also help us in that regard. The joint commission, in their missives on the use of opioids and the fact that hospitals should be endeavoring to reduce the use of opioids, especially in certain patient populations known to be most problematic, clearly helps us, and as people gain experience with Exparel and realize that we really do solve that problem, that helps us. And increasingly over the last several months, the whole HCAHPS program where hospital pain scores are readily available on the Internet, and in our discussions with C-Suite executives, especially CEOs, they are acutely aware of their pain score and we see more C-Suite initiatives to improve pain scores largely because of the impact that that will have on total hospital reimbursement, et cetera. So we’re seeing stuff at the local level but we’re also getting help from different regulators and regulatory bodies, and a lot of their activities have helped us in our C-Suite discussions, and so that gets back to the whole idea of how we’re approved. And I would tell you that the recent big formulary wins are much more likely to be unrestricted all access than the big formulary wins we had six months ago.

Okay. And there’s a lot of discussion into penetration within orthopedics. The question is how important is getting the formal nerve block indication to really accelerating that penetration, and also excuse my ignorance, are all orthopedic procedures, do they involve the nerve block procedure?

They used to, so it’s an interesting scenario that you pose. It’s not an ignorant question at all, Corey; actually it would require a long discussion. But the interesting scenario that we’re finding ourselves in here is that when orthopedic folks, and I’m focusing primarily on the knee here, which is where we have the bulk of our experience to date, once they start to use Exparel in an injection technique that has been largely driven by our KOLs and some of the real influence molders in this space, they stopped doing femoral nerve blocks and the result of that is that they can reorganize the way their OR operates in terms of staffing. So what you realize is a lot of the staffing and a lot of the ancillary activity that went with a total knee was related to the quad weakness and the fact that they were doing a femoral nerve block. So by replacing that femoral nerve block with an infiltration with Exparel, we not only see all of the benefits of LOS and opioid reduction that we’ve seen with all of our other strategies, but you can see personnel savings and you see earlier ambulation and you see earlier discharge – all of the things that are a result of a reduced femoral nerve block. Now it’s very early in that adoption cycle. There are still millions of femoral nerve blocks done, but one of the areas of focus at the symposia at the American Academy in a couple of weeks in Chicago will be folks talking about how their patients have responded when they’ve been able to not do a femoral nerve block, and so it puts us in an interesting strategic scenario here as we get the first set of our nerve block data.

Does that remove the need for an anesthesiologist to be involved, and are there political implications with that for them not getting paid?

It does not—there would still be an anesthesiologist for a total knee – this is a pretty severe surgery – but it does have an impact on their ability to directly bill for the femoral nerve block, and it does have an impact on staffing that would be required not only for the femoral nerve block, which generally would involve an anesthesia tech, but also a CRNA who would be largely responsible for making sure that the morphine PCA machine was operating correctly and the PAC-U and all of that stuff. So again, another insightful question, and one of the offsets we hope here is that our TAP block program is largely done through anesthesia. So while we could have economic impact on their practice as we have an impact on femoral nerve blocks in knees, we also think that the major opportunity in abdominal soft tissue surgeries is with Exparel used in TAP infiltrations, and so we come right back to them and we’re working with them aggressively on that program.

Sorry for all these questions, but do you still want a J-code? Do you need one?

Oh, absolutely. Yeah, yeah. I don’t know if we need it, Corey, but we certainly want to get it. As you know, we did not—well, let me give you a little bit of history here. We actually filed for the J-code at the same time that the drug was launched, and so we had no data, no actual marketplace data to support that there was a need and a market request for the use of the product, and so we were turned down largely because it was impossible for us to reference that there was—you know, which surgical procedures docs were asking for it, and what the savings associated with the use of the drug in that setting were going to be. We now have all of that data and we will resubmit. The way this works is you go to the regulators in April and you find out whether you were approved or not in November, and so we are going through that process, Corey, and we now have the data appropriate to support our request, and we’ll find out in November whether we got it or not.

Last question – I certainly respect your not having revenue guidance for Exparel for 2013, but how much of that is internally do you really not know how much you’re going to sell, or is that just something you don’t want to publicly provide at this point in time?

You know, it is a dynamic situation, Corey, and this is the first March 7 that we’ve ever sold the drug on, so we do continue to learn. I mean, I’ll give you an example. We were told by folks who have joined the organization from other folks that operate in this space that plastics were going to be very strong in December, but I would tell you that even with that warning, they were much stronger than I was thinking they were going to be. So there are some seasonality aspects to this that we want to make sure we understand, and then I would tell you as the CEO who is largely responsible for determining that we’re not going to provide any guidance, there’s 99 ways for us to be wrong and only one way for us to be right, and there doesn’t seem to be any obvious reason to put ourselves in that position, from my perspective.

All right. So consensus is still too low for 2013.

Ha! Now you’re going to hear from Scibetta!

Corey, obviously we talk to all of our research analysts because the investment community does focus on what you guys say in absence of our providing guidance. But beyond that, I will say that your numbers are your numbers and we’re just going to focus internally on execution.

Great. Thanks for all the time.

And keep in mind, Corey, that we really would not have gone to orthopedics with the trajectory that the physicians have adopted the product, and I would say that even more so in the spine area. So we do continue to explore with our KOLs and our ad boards different places to use this product and that has at least the potential to have a material impact on the numbers on a quarter-by-quarter basis. So I think we’re better off just focusing on selling as much as we can and making as much as we can, and then the chips will fall where they may.

Great. Thanks again for the time.

Thank you, Corey. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone telephone. If your question has been answered, please press star followed by two. The next question is from Douglas Tsao. Please go ahead, Douglas.

Hi, good morning guys. If you could provide a little detail in terms of the timelines for the FDA signing off on Suite C.

You know, as much as you can with the FDA as far as—you know, this stuff is described fairly specifically, so the process is we have to commission the suite and make sure that it’s working properly, and then make the appropriate stability batches. There are timelines associated with the stability batches that will guide the SNDA process, and then the FDA has four months to approve an SNDA or—it’s not actually an SNDA, it’s SBA-

PAS.

PAS – I’m sorry, PAS for the new facility. And so there is no such thing as a black and white timeline. We can work in blocks of a month or two, and when you put all that together, you would expect that your best guess is that sometime early in 2014 is when that facility would come online.

Okay, great. And then I was just hoping you could provide a little color in terms of operationally what it means that you’ve transitioned the sales force from Quintiles to internal, and how you’re now handling sort of additions and changes from the recruiting standpoint. Is that being done sort of on a contract basis externally, or are you trying to bring that in-house now?

So I’ll just address the beginning of your question, Doug, and then maybe Dave will comment more broadly. So yeah, we did take on the sales force in the end of January, and it was a fairly large endeavor on an operational level. But I think from the outside world, it doesn’t really mean that much. We’re excited that they’re employees and they’re excited to be employees, and we had to do some mechanical things to make sure we could support them at the G&A level with expenses and so forth. But it’s more of a cultural thing from the way you should probably think about it, is that we always said to them that we would at the appropriate time transition them onto our headcount. So as we go forward, we have full responsibility for managing that sales force and for hiring people to fill voids and so forth.

Yeah, no that’s right, and we—our HR department, Doug, is doing all the recruiting. I mean, we do use outside resources to supplement their activity, but there is no Quintiles relationship for that.

Okay, great. And then just one final question – obviously I know December you saw this sort of surge, especially in plastics, I think you’ve spoken about. Just curious—and I think you confirmed earlier in the call, but how was January relative to December?

Yeah, I think we can comment generally that we’re happy with the progress that we continue to make, but I don’t think it would be appropriate to comment specifically on what transpired in January. We’ll handle obviously all of Q1 in the May earnings call.

Okay, great. Thank you.

Thank you. The next question is from the line of Cliff Murray from Empire Asset Management. Please go ahead.

Good morning. I have a few questions. The first one is that your label currently is extremely broad so that reimbursement doesn’t seem to be an issue for off-label utilization. Is that correct?

We don’t believe that we have any off-label utilization. Our label is for a single dose (inaudible) for post-surgical pain, so we don’t—anything that we talked about today, other than the femoral nerve blocks where we’re doing a formal Phase III program for inclusion into the package insert, is on label.

Oh, that’s a great answer, and I appreciate it; and it’s a perfect segue for the next part of my question. So was it really necessary to perform the pivotal trials for TKA and the posterolateral thoracotomy approach? And finally, if you would provide me with a little more color on the potential TAP indication and exactly what trials are ongoing, and when we can expect some data on that. I’m guessing that you’re going to make some sort of application for an additional indication, which doesn’t seem necessary. It’s obviously a promotional asset to have the data. Is that your primary focus?

Well, there’s a whole bunch of questions in there, so let me see if I can answer them in a way that will make sense. There is, in our view, a significant need/requirement for us to get a formal package insert claim for nerve block. It is currently a contraindication in the package insert, and so there’s two sides to that, and we clearly have significant interest in the medical community on the use of this product in nerve blocks. So keep in mind, Cliff, that today if you wanted to provide several days of coverage for a nerve block, you would put a perineural catheter next to the wound, hook that patient up to a drug source – either bupivacaine or ropivacaine – and then a pump, and you would continually pump the drug up into the nerve area to achieve pain control, and we can get rid of all of that with a single injection of Exparel. So there is a reason to have a nerve block claim for sure, in my view. Specifically, if you’re talking about an intercostal block, cardiothoracic surgeons and trauma surgeons and people who generally would be putting in chest tubes in various ways to improve the surgical regimen, are very interested in how to control pain, especially in the PAC-U and in this immediate post-surgical environment, where patient respiration is many times impaired by the fact that there is so much pain associated with a chest tube that the patients actually have a delayed recovery profile. So we know from some of our previous work that an intercostal block with bupivacaine is used there fairly often. You don’t need an ultrasound machine because you can put the drug directly on the nerves under direct visual examination, and we can improve the pain…

That’s a great answer, and I appreciate it. And if you could just give me a little bit of guidance as to when I can expect to see some of the nerve block data and some of the TAP data?

So nerve block is enrolling now, Cliff, on both sides, and we’re expecting that these trials will be done either very late this year or early next year. TAP is working its way through the steering committee and the protocols are being commented on by the KOLs in the space, and people are doing a lot of these procedures now, anesthesiologists almost entirely. And so we’re learning from all of their guidance and making sure we answer all of their questions, and we expect that we would kick that trial off in the next few months and, again, have data by the end of the year or very early next year.

Okay. I have just one final question, if you will. There are some problems with long-term local anesthesia, most notably the fact that patients won’t be able to report or feel pain that may be associated with an adverse post-surgical event. Surgeons do come by postoperatively and examine the belly of a patient for pain, rebound tenderness, et cetera. So the bottom line is do you see any procedures where Exparel really should not be used?

In terms of the TAP infiltrations, Cliff, or in general?

Well you know, in general. I think it’s a more general question here.

Yeah, we’re taking our lead largely from the marketplace here. I think that there are procedures where the precise and meticulous nature of the injection technique is critically important, and you’ll see that we’re going very slow there and working with professional resources – you know, our teams of nurses and physicians, et cetera – to make sure that we take those practices and those opportunities on in a very measured way, one practice and one physician at a time. Our experience so far at least is that when clinicians have used this drug, as long as we stay in the bounds of—you know, we don’t have a pediatric claim, we don’t have a nerve block claim, we don’t have an epidural claim. We don’t think that the drug should be used, for example, in an environment of a sinusitis or something like that. I mean, obviously that would be silly. We’ve had people ask us about—how about the pain associated with a pacemaker, et cetera? Even though this drug, the cardiotoxicity profile of this drug is really safe from our perspective and the label states as such, there are clinical areas where common sense just says you wouldn’t use a product that has any potential for upsetting the cardiac rhythm, et cetera. So there is a few, but in all the places that the drug has been used by clinicians, we haven’t had any experience where somebody has come back to us and said, I don’t think the drug would be used there. Most of the time when the drug—when we’ve cautioned against the use of the drug, it had been places where we have a direct contraindication in the package insert and we don’t have data.

That’s great, and congratulations on a great quarter and a great launch.

Yeah, and I’ll expand that a little bit too, Cliff, if you don’t mind. We think that we have got an IP profile here that extends for many, many years, so we really want to be patient and thoughtful about how we continue to work with the KOLs and the clinicians in the marketplace about additional uses of this drug. So I think you’ll see that the last thing this management team will do will be moved by a quick sales opportunity. I think we’ll be very thoughtful and move very cautiously into areas where we don’t have good data.

Thank you very much.

Thank you. The next question is from the line of Patti Banks from Discern Securities. Please go ahead.

Good morning. Just two brief questions. One – Dave, can you talk a little bit about pricing? I know that you’re still in the access phase, but at one point you had said there was some sensitivity initially around maybe the $300 mark. Can you just kind of talk about whether that’s maybe changed a little bit now that the doctors have had the good initial success on the efficacy side with the drug?

Yeah, so just for everybody, Patti’s reference is when we pre-launched, when we did our pricing studies, on the initial analysis from over 600 doctors and pharmacists, what we heard is that we should price the drug into the $250 range unless we had strong pharmaco-economic data. When we got the health outcomes data and all the opioid sparing data, et cetera, we had sequestered and escrowed that group of people and we went back to them and said, now with this data, what do you think the price point should be? And we got up into the 400’s, with the exception of where a clinician was asked if they would be a champion and take the drug to the formulary committee in their hospital. So in other words, they would use it if it cost $450, but they wouldn’t go fight for it to be approved in the hospital. So we launched at the $285 price point with the idea that we needed as broad an access opportunity as we could to get to $100 million in net sales as rapidly as we could. Now that we’re publishing all of the data, and you’ve seen the Steve Cohen data, you will see the lap colectomy data, the ileostomy reversal data that is all highly positive, you’ll see the Exclaim data that’s the same thing in plastic surgery and then we’ll start to report on some of the hospital experiences and drug utilization with orthopedics, and all of those things demonstrate that we have savings of several thousand dollars when you use a $285 drug. So we do see the opportunity to have some increased leverage going forward, but I still think that we’re in the phase of ensuring that we get access and that we have an opportunity to get this product used by as many different clinicians as we can. So I wouldn’t expect anything on the short term, Patti, but a longer term answer to your question is yeah, we think all of the data that’s been assembled here over the last 18 months, as you see it published, will give us a lot more opportunity to take some strategic pricing actions going forward.

So if I look at 2013, we shouldn’t necessarily assume a 5% increase in there at this point?

I wouldn’t assume anything until we continue to visit. One of the other aspects of this, frankly, is as new physicians adopt the drug, we want to let them get comfortable and make sure that we’re on our break-even ’14 scenario that Jim talked about, and then we can talk about how we move against pricing going forward.

Okay. And then just one other brief question. I wanted to follow up on the manufacturing. If there is any kind of delay in Suite C coming online, is there any potential problem in meeting demand? And maybe you can remind me what the capacity is of Suite A.

Yeah, we’ve said many times over the last few weeks and as part of the financing that we’ve got $100 million capacity in A. There is always a chance, depending what the delay at the FDA could be and might be. We don’t foresee any issue there, Patti, but we’re dealing with regulatory agencies and it’s impossible for us to actually put a firm timeline on when they’re going to come in and inspect our facility. If we stay within the bounds of what would be traditional in terms of how the FDA handles these kinds of inspections, there should be no issue.

Yeah, and also Patti, I want to remind everybody that Suite C broadens our capacity and is more efficient, but it is two 45-liter skids fully automated, just like the commercially approved Suite A is a 45-liter semi-automated. It’s the same process, it’s the same product, so from an FDA evaluation perspective this is not a different manufacturing process. It’s the same one at the same scale.

Okay, thanks.

Thank you for your questions. I would now like to turn the call over to Dave Stack for closing remarks.

Thanks, Catherine. Thank you again for joining us today. We would like to note that coming up we will be presenting at the Barclays Billable Healthcare Conference in Miami on March 13, and we will be attending the Jefferies 2013 Denver Specialty Pharmaceutical Summit on March 21. We appreciate your time and support and look forward to updating you on our progress in the future. Thanks everybody.

Thank you for joining today’s conference. This concludes the presentation. You may now disconnect and have a very good day.